Budget airline Ryanair said the heatwave across Northern Europe has kept
people at home, causing its passenger numbers to dive in recent weeks.

The Irish carrier reported a 3pc jump in passengers to 23.2m in the first quarter on Monday but operating margins fell sharply from 10pc to 8pc.

Chief executive Michael O'Leary said in a statement that the airline was feeling the effect of the recent hot spell, with cash-strapped consumers opting to stay at home to enjoy the fine weather.

"Yields on close-in summer bookings have been slightly weaker in recent weeks due, we believe, to the heat wave in Northern Europe," he said.

Mr O'Leary said as long as the current downturn ends, he expected a stronger performance over the next quarter despite tough comparatives caused by more people flying because of the London Olympics last year.

"As ever, our outlook remains cautious for the full year as market conditions are tough with recession, austerity, high fuel costs, and excessive government taxes... impacting air travel demand and yields. While we expect full year traffic to grow 3pc to 81.5m, we still have no visibility over next winter's yields."

Over the three months ending June 30, Ryanair's revenue rose 5pc to €1.34bn compared with the same period last year. Profit after tax dropped by more than fifth to €78m, a fall the airline had predicted.

"As previously guided higher fuel costs and the timing of Easter led to first-quarter profits falling," said Mr O'Leary, noting that add-on sales were on the increase and now account more than a fifth of total income. "Ancillary revenues grew by 25pc to €357m driven by the successful development of reserved seating, priority boarding, and higher admin and credit card fees."

The strong demand for allocated seating - a departure from the traditional low-cost airline model - had came as a shock, said Howard Millar, Ryanair's chief financial officer. "We've been pleasantly surprised with the uptake - passengers want reserved seats," he told Reuters.

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The airline used the trading statement to renew its attack on the UK Competition Commission (UKCC) after it prevented Ryanair for a third time from taking over Aer Lingus, in which the budget carrier has a 29.8pc shareholding.

"Despite no evidence of any material influence, and compelling evidence that competition between Ryanair and Aer Lingus has intensified (rather than lessened)... we now expect that the UKCC will unlawfully attempt to force us to sell down most, if not all, of our 29.8pc stake in Aer Lingus on some baseless or invented claim that competition in the future 'might' be lessened," the statement said.

"Given the Commission's total lack of evidence they are now reduced to dreaming up bogus future concerns that Ryanair 'might' prevent another EU airline acquiring Aer Lingus, despite Ryanair's repeated public statements that we would consider any offer by another EU airline to acquire Aer Lingus, and/or acquire Ryanair's shareholding."

Earlier this month Ryanair threw down the gauntlet to anti-trust regulators by offering to sell its holding in Aer Lingus to any EU airline which buys 50pc of Irish flag-carrier - effectively challenging the UKCC ruling that Ryanair taking full control would harm competition.

"The UKCC has no credibility in this case," Ryanair's statement said. "This is absurd in the case involving two Irish airlines when Aer Lingus affects or carries very few UK consumers. Ryanair will strenuously appeal any such ruling."

Ryanair said costs rose 4pc, an increase that was in line with it making longer flights. Higher oil prices meant that fuel costs rose by 6pc €577m, just under half of the airline's total operating costs. Excluding fuel, unit costs rose by 6pc over the quarter, slightly faster than the increase in sector length, because of a 2pc rise in flight crew pay and charges for air traffic control going up.

The Dublin-based airline held its forecast for earnings of €570m to €600m in its full year to end-March 2014, against last year's record of €569m.